Bill O'Reilly's departure creates new challenges for Fox

Network must figure out how to hold on to its loyal conservative viewers while improving workplace culture

Demonstrators called for the firing of Fox News Channel TV anchor Bill O'Reilly outside the News Corporation headquarters in New York City the day before the network announced his departure. (Mike Segar/Reuters)

With its biggest star departing in another blow-up over sexual harassment, Fox News faces some big challenges. It now has to show that it can hang on to its loyal conservative viewers, improve its working culture, and still continue to make big bucks for its corporate parent.

The company said Wednesday that it had parted ways with longtime host Bill O'Reilly after a "thorough and careful review of allegations against him."

Dozens of advertisers ditched The O'Reilly Factor after a New York Times report detailed $13 million in payouts to five women over his alleged unpleasant behaviour. O'Reilly denied the accusations.

Another female Fox contributor subsequently came forward with a new complaint against the Fox host, and there are reports of more. Women protested outside Fox News headquarters.

O'Reilly's departure is the second major blow for the right-leaning news network in nine months. Fox's longtime CEO Roger Ailes resigned abruptly amid similar sexual harassment charges last July. Its leading female star, Megyn Kelly, decamped for NBC in January.

The network's parent company, entertainment giant 21st Century Fox, insisted that Fox News will weather the current storm just fine, noting in a statement the "strength of its talent bench" and expressing "full confidence that the network will continue to be a powerhouse in cable news."

Money machine

That certainly could happen, though it probably won't be easy.

Some analysts believe that James and Lachlan Murdoch — the sons of 21st Century Fox executive chairman Rupert Murdoch — made the call to change the culture at the network and to cement their control following Ailes's departure.

"Getting rid of the old guard is a way to do that," said Dan Cassino, a professor at Fairleigh Dickinson University and the author of Fox News & American Politics: How One Channel Shapes American Politics & Society.

Bill O’Reilly out at Fox2:11

But O'Reilly has been on Fox News for more than two decades. The O'Reilly Factor has generated a huge ad bonanza for Fox, one that yielded more than $178 million US in 2015. It's the top-rated show on the No. 1 cable network — one that, according to the investment bank Nomura's estimates, accounts for fully 20 per cent of profits at 21st Century Fox.

Now, the top ratings for O'Reilly's time slot — and Fox's other prime-time shows — could be at risk.

"He's been the linchpin" of the lineup, said Jane Hall, an American University professor and former Fox contributor, who noted that it will take a while to see whether his loyal audience sticks with O'Reilly's replacement. That will be Tucker Carlson, whose show is moving to the 8 p.m. slot on Fox.

Others say that O'Reilly's firing won't be a sticking point for most Fox viewers. "When we look at data, at what programs people report watching, you just don't find people who watch Bill O'Reilly and nothing else on Fox," Cassino said.

Fox also has a big financial safety cushion in the fees cable companies pay the network, which dwarf its ad revenue, according to Nomura media analyst Anthony DiClemente. Even if there's some disruption in ad rates or spots, he said, there's a "massive backstop" in those payments, which are long-term deals.